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Do Restaurants Need an HR Department?

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Nate Lozier
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What’s the value of having an internal HR team? For national restaurant chains and multi-store franchises, it’s a must, but many smaller operations have started to hire HR specialists for their restaurant. HR employees can do far more than resolving interpersonal issues, like writing employee handbooks, hiring new employees, and handling social media promotion. Overall, there are certainly pros and cons to consider when adding the headcount.

Compliance with Employment Laws 

One of the primary benefits of having an HR department is ensuring compliance with federal and state employment laws. HR professionals can help ensure that the restaurant is following regulations for minimum wage, overtime, and employee classification, among other things. 

Recruitment and Hiring 

HR professionals can help with recruitment and hiring by posting job openings, screening candidates, and conducting interviews – although they should only be one of several people on that final step. This can save time for restaurant owners and managers who may not have the expertise or time to manage the hiring process effectively. With a labor shortage in the industry that has dragged on since the pandemic, having a dedicated resource to hiring can drive a big impact. 

Employee Training and Development 

HR professionals can help with employee training and development, which is especially important in the restaurant business. Proper training can improve the quality of service and reduce mistakes, which can lead to increased customer satisfaction and profitability. With the right tools, they can also easily track employee progress and reduce training time significantly. 

Employee Relations  

HR professionals can serve as mediators in employee relations issues. They can help resolve conflicts, provide guidance on workplace behavior, and ensure that employees are treated fairly and equitably. For restaurant managers, this removes the headache of managing interpersonal problems (most of the time) and allows them to focus on more important tasks.

While there are many benefits to having an internal HR employee at your restaurant, there are also some cons. 

Cost 

One of the main drawbacks of having an HR department in a restaurant business is the cost. HR professionals are typically paid a salary, and smaller businesses may not have the budget to hire a full-time HR professional. Outsourcing HR services can be an option, but it can still be costly. This is why most smaller restaurants, even some chains, have long operated without an HR department, in an industry where profits can be very thin. 

Staffing Challenges 

The restaurant industry can be challenging when it comes to staffing. High turnover rates, seasonal fluctuations in business, and a need for flexible scheduling. These factors can make it difficult to maintain a stable HR department. 

Time Constraints 

Restaurant owners and managers often have limited time to devote to HR-related tasks. This can make it difficult to stay on top of compliance, recruitment, and employee training. 

Limited Need 

Depending on the size of the restaurant business, there may be limited need for an HR department. Smaller businesses may be able to manage HR-related tasks with a part-time employee or by outsourcing HR services. 

Conclusions

HR plays an important role in the restaurant industry, helping with compliance, recruitment, training, and employee relations. However, there are also challenges associated with having an HR department, such as cost, staffing, and time constraints. As such, restaurant owners and managers should consider their specific needs and priorities before deciding whether to invest in an HR department.